Stifel Nicolaus - All posts tagged Stifel Nicolaus

Stifel Nicolaus analysts J. Jeffrey Hopson and Marc Torrente estimate that BlackRock’s (BLK) iShares unit is on track to pull in a “solid” $17 billion in ETF inflows for the third quarter. The overall industry is on pace for $47 billion, by their count.

The analysts also weigh in on BlackRock’s coming ETF fee cuts, which they call “the correct decision” to ensure that iShares continues to have the most competitive suite of products:

We think iShares is making the correct decision now to make sure that it offers the most competitive suite of products in terms of fee rates, a full range of products, attractive features (liquidity, transparency, index coverage), ease of use, and service and advice/education that meet the needs of the respective investor channel.

Expect an update on the fee cut issue either with the third-quarter conference call next month or shortly before it, they write.

From the note:

A holistic strategy update that includes enhanced product development and a more efficient interaction with the advice channel could jump-start their business and facilitate a full participation in the dynamic industry growth ahead. Our analysis suggests that the market share issue is much more complex than just fee differentials, and is particularly acute in a just a few areas, with Emerging Market Equity being the most obvious; there is a big fee difference and iShares made a portfolio misstep a couple of years ago by seeking liquidity first and suffering a high tracking error (since corrected).

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